February 15, 2018

US corporate investors shut out of Bitfinex margin trading

Business

February 15, 2018

Corporate investors in the United States reported difficulties accessing Bitfinex’s margin trading facility, in the wake of news that the exchange was shutting margin services for individual investors.

According to comments posted from several corporate investors on Reddit over the past few days, Bitfinex margin facilities appeared to have been closed to their investments, despite prior reassurances from the exchange.

When Bitfinex terminated margin trading services to U.S. individuals back in November, they specified explicitly that corporate investors would not be affected and would continue to enjoy uninterrupted access to trading cryptocurrency markets on margin.

However, following the slew of comments on Reddit and elsewhere, it now appeared as though the situation may have changed suddenly over the past few days.

For some investors on Reddit in particular, the disruption caused significant difficulties, including an inability to manage open positions.

“We’ve had a corporate account with Bitfinex since early 2017 and [are] approved for both exchange, margin, and funding. […] We’ve been making 6-figure trades on margin and currently have 2 margin positions open. On Feb 7th, […] we were locked out of margin trading. No explanation or warning of why our account can’t trade on margin,” according to one Reddit user.

“Worst yet, we can’t manage our margin positions. Not good in this very volatile market. We’ve received a couple of liquidation warning emails as the market dived down yesterday. We sent a support ticket […] and probably over 7 emails. No response from Bitfinex. It appears that they haven’t even opened any of the emails,” another use said.

Shortly thereafter, a response was posted to these concerns, advising that the issue had been forwarded for immediate attention. Interestingly, the representative from Bitfinex explained that U.S. corporate investors should not be trading on margin—creating further confusion.

At the time of writing, it remained unclear whether Bitfinex has changed its policy, and whether any change will be a temporary or permanent measure. Nevertheless, the confusion has been causing concern among margin traders, including investors with significant margin positions in often volatile cryptocurrency markets. While the matter remains unresolved, corporate customers were likely to remain concerned about the future of their open positions, and their margin facilities.

Note: Tokens in the SegWit chain are referred to as SegWit1X (BTC) and SegWit Gold (SWG) and are no longer Bitcoin. Bitcoin Cash (BCH) is the only true Bitcoin as intended by the original Satoshi white paper. Bitcoin BCH is the only public block chain that offers safe and cheap microtransactions.